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Posted: 2018-12-06 00:00:00

Charter Hall Group announced that its flagship industrial funds, the $3 billion wholesale Charter Hall Prime Industrial Fund (CPIF) and the $1.5 billion wholesale Core Logistics Partnership (CLP) have formed a 50/50 joint venture to acquire a premium six-hectare site at Eastern Creek in Sydney’s west for circa $35 million, paving the way for construction of Compass Logistics Estate.

The acquisition is in line with the funds’ strategy to maximise existing land-bank value via “prime” investment product, creating new builds to hold assets close to critical infrastructure along the east coast of Australia. In July, CPIF and CLP partnered to each acquire a 50 percent share in a 61,400sq m Coles-leased distribution centre at Smeaton Grange in Sydney’s south west, which is situated on a strategic 16.7 hectare site.

Following an oversubscribed $600 million equity raising, CPIF has been an active participant in delivering new purpose-built industrial facilities and strategically acquiring assets. Once the full deployment of investment capacity from the equity raise is complete, CPIF funds under management will rise to $4 billion.

CPIF fund manager, Richard Mason, commented on the active management of the fund: “Whether it is through our $900 million development pipeline that is expected to deliver over 550,000sq m of new logistics facilities or through new acquisitions such as Eastern Creek and the recently acquired $118.5 million Australian Federal Police portfolio in Sydney and Melbourne, we are providing investors unrivalled access to the strong-performing and tightly held industrial property markets.”

The new estate will be Charter Hall Group’s latest logistics project and is set to change the face of Sydney’s industrial precincts, as major corporations set their sights on Sydney’s western growth corridor, in anticipation of the projected infrastructure and population growth.

Compass Logistics Estate, which will be established on the corner of Eastern Creek Drive and Old Wallgrove Road, will be a state-of-the-art, 33,250sq m logistics facility, close to customers and the Sydney Motorway Network.

Savills Industrial's Michael Brislane and Mick Ferreri, in conjunction with Knight Frank, have been appointed to market the project, saying they expected strong enquiry from major industrial users looking for a cutting-edge corporate facility reflecting a successful corporate image.

“We anticipate strong competition for this development, based on the pent-up demand from major industrial tenants wanting to get a foothold in the Sydney growth corridor," Mr Brislane said.

“Both the state and federal governments have committed to significant infrastructure investment projects across the Greater Sydney Area to assist and facilitate the projected growth in both the state economy and population.”

He went on to say that Charter Hall had “a proven record of accomplishment in the development of quality industrial and logistics real estate”.

“Charter Hall is a leading developer of industrial property in Australia, with more than 116 industrial facilities across more than 2.8 million square metres in key growth markets,” he said.

“The successful tenants will receive a premium product in a strategic and highly exposed location, with immediate access to key logistics routes throughout the core Western Sydney market.”

Compass Logistics Estate will comprise a logistics warehouse totalling 32,000sq m, plus 1,250sq m of office space, which can be divided into two 10,000-20,000sq m tenancies and customised to suit prospective tenant’s specifications.

Sustainability measures will set the development apart from similar properties, with several features incorporated to enhance operational and environmental performance, minimise outgoings, and deliver enhanced user comfort.

Measures will include rainwater harvesting for irrigation and toilets; efficient LED lighting as standard including daylight harvesting; and a 100-kilowatt roof-mounted solar array for each tenancy.

The estate will form part of the Sydney western growth corridor, with the state government pledging $72.7 billion to infrastructure throughout the next four years, including $16.8 billion on the WestConnex tunnel project and $5.3 billion on the Western Sydney Airport.

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